Decrypting Blockchain: Unlocking The Internet Of Value
March 26, 2018

Decrypting Blockchain: Unlocking The Internet Of Value

Executive Summary

Are we in a Crypto Bubble? Or, is the hype around Blockchain justified? Ten years ago, at the height of the Great Recession, Satoshi Nakamoto, a pseudonym of a still unknown programmer, proposed a “peer-to-peer transfer of virtual cash without going through a financial institution.” Today, Cryptocurrencies enjoy an estimated market value of $300 billion. Yet Blockchain and Cryptocurrencies still attract plenty of skepticism and controversy.

What to believe? This report will explore how various forces have shaped the current Blockchain landscape. In particular, we will review Blockchain basics, including public and private versions of the system, a fat versus thin protocol, and the potential impact of creating a distributed, decentralized ecosystem. We will review key turning points in the Blockchain ecosystem, examine venture capital and corporate investments in Blockchain startups and analyze the growing interest of large financial institutions and technology companies in this space. We will also look at Blockchain applications today and offer potential Blockchain applications for the future. Finally, we highlight key risks, challenges, limitations of the Blockchain technology and overall ecosystem as it stands today. (Readers would notice that a discussion around ICOs – Initial Coin Offerings – is conspicuously missing from this report. We believe this trend in startups raising capital via ICOs warrants a stand-alone research report, and we will be following up with one shortly).

“A lot of people automatically dismiss e-currency as a lost cause because of all the companies that failed since the 1990’s. I hope it’s obvious it was only the centrally controlled nature of those systems that doomed them. I think this is the first time we’re trying a decentralized, non-trust-based system.”

– Founder of Bitcoin in Feb 2009, Satoshi Nakamoto

Since Bitcoin introduced the world to Blockchain, people have increasingly recognized the technology’s potential to decentralize a wide range of institutions. But our research and conversations with various stakeholders suggest the technology is more than just cutting out a central authority or middlemen.

Blockchain is still new. We believe investors and large corporations are still looking for real-world uses beyond Cryptocurrencies. Widespread adoption of Blockchain will likely come from consumers instead of businesses. But we think the future is bright, especially as the technology attracts more investment and innovation.

VCs already invested Over $2 billion in 150-Plus Blockchain startup companies
VCs already invested Over $2 billion in 150-Plus Blockchain startup companies
Source: Sharespost Research; CBInsights; Coindesk Q3 2017 report; Data for 2017 is till end of Q3.
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Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

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Copyright SharesPost, Inc. 2020. All rights reserved.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

This article does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2020. All rights reserved.